Sanderson Farms 2Q profit falls on feed costs
Published 5:04 pm Friday, May 23, 2008
Poultry producer Sanderson Farms Inc. on Thursday reported a drop in fiscal second-quarter profit as feed grain costs surged, but still topped Wall Street expectations.
For the quarter ended April 30, profit fell to $6.2 million, or 30 cents per share, from $26.9 million, or $1.33 per share, during the same period a year prior.
Revenue rose 20 percent to $433.9 million fro $360.5 million.
Analysts polled by Thomson Financial had actually expected a loss of 7 cents per share on revenue of $435.3 million.
“Like others in our industry, the company’s financial results were affected by feed grain costs, which were significantly higher than they were in the same period a year ago, and higher than the first quarter of this year,” said Joe F. Sanderson Jr., chairman and chief executive.
The price of corn and soybean meal, the company’s main feed ingredients, increased by 28 percent and 47 percent from a year ago. Expenses rose 34 percent to $423.4 million.
Meanwhile, overall market prices for poultry products were mixed in the second quarter. While bulk leg quarter prices were up 3.9 percent year-over-year, boneless breast meat prices fell 10.1 percent.
The company expects feed grain costs to remain high at least through fiscal 2009.